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eClerx Services Ltd.

BSE: 532927 Sector: IT
NSE: ECLERX ISIN Code: INE738I01010
BSE 00:00 | 22 Jan 1065.90 -0.30
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VOLUME 145
52-Week high 1608.00
52-Week low 1000.00
P/E 17.75
Mkt Cap.(Rs cr) 4,125
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1060.00
CLOSE 1066.20
VOLUME 145
52-Week high 1608.00
52-Week low 1000.00
P/E 17.75
Mkt Cap.(Rs cr) 4,125
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

eClerx Services Ltd. (ECLERX) - Director Report

Company director report

Dear Members

Your Directors are pleased to present their Eighteenth Annual Report along with theaudited annual accounts for the financial year ended March 312018.

1. FINANCIAL HIGHLIGHTS

Key aspects of Financial Performance/ Operating Performance of the Company for the yearended March 312018 are tabulated below inter-alia pursuant to the Companies (Accounts)Rules 2014.

The consolidated performance of the Company and its subsidiaries has also been set outherein wherever required:-

Standalone

Consolidated

Particulars 2017-18 2016-17 2017-18 2016-17
Income from operations 11440.21 11620.22 13650.62 13300.33
Other income 438.27 284.79 402.31 282.00
Total Revenue 11878.48 11905.01 14052.93 13582.33
Operating expenses 8180.72 7406.62 9987.48 8705.79
Earnings before interest tax depreciation and amortization (EBITDA) 3697.76 4498.39 4065.45 4876.54
EBITDA% 31.13% 37.79% 28.93% 35.90%
Finance costs - - 0.40 0.25
Depreciation goodwill & amortization expenses 295.99 364.07 482.42 517.96
Earnings before exceptional items & tax 3401.77 4134.32 3582.63 4358.33
Exceptional items 212.59 (80.41) 212.59 -
Net profit before tax (PBT) 3614.36 4053.91 3795.22 4358.33
Taxes 833.17 742.43 895.80 819.03
Profit for the year before minority interest 2781.19 3311.48 2899.42 3539.30
Minority interest - - (0.42) (0.97)
Profit for the year attributable to shareholders 2781.19 3311.48 2899.84 3540.27
NPM% 23.41% 27.82% 20.63% 26.07%

2. OPERATIONAL AND FINANCIAL STATE OF AFFAIRS OF THE COMPANY

The information on operational and financial performance etc. is provided under theManagement Discussion and Analysis Report which is annexed to the Directors' Report andhas been prepared inter-alia in compliance with the terms of Regulation 34 of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 ("ListingRegulations").

Apart from the information contained in Notes to the Financial Statements no materialchanges and commitments have occurred after the closure of the FY 2017-18 till the date ofthis Report which would affect the financial position of your Company.

3. DIVIDEND

Based on the overall Company's performance your Directors are pleased to recommend adividend of ' 1/- (10%) per share. The total quantum of dividend payout if approved by theMembers will be about ' 46.49 million including about ' 7.86 million which will be paid bythe Company towards dividend tax and surcharge on the same.

The Company had paid a dividend of ' 1/- per share (10%) in the previous year. TheCompany intends to maintain historical payout ratio and is exploring efficient methods toachieve the same. The historical data of dividend distribute by the Company is as follows:

Dividend FY 2016-17 FY 2015-16 FY 2014-15 FY 2013-14 FY 2012-13 FY 2011-12 FY 2010-11
1 Dividend (Final) 1.00 1.00 35.00 35.00 25.00 17.50 22.50
2 Total Dividend for the year 1.00 1.00 35.00 35.00 25.00 17.50 22.50
3 Dividend as % EPS (Basic) 1.4% 1.2% 46% 41% 43% 32% 53%
4 Dividend as % Profit After Tax 1.4% 1.2% 46% 41% 44% 32% 53%
5 Tax Amount (' million) 8.12 8.36 222.28 179.50 126.93 82.50 105.32

The register of members and share transfer books will remain closed from ThursdayAugust 23 2018 to Wednesday August 29 2018 (both days inclusive) for the purpose ofascertaining entitlement for the said dividend. The Eighteenth Annual General Meeting ofthe Company is scheduled to be held on Wednesday August 29 2018.

4. DIVIDEND DISTRIBUTION POLICY

Pursuant to Regulation 43A of the Listing Regulations your Company has formulated adividend distribution policy with regards to distribution of dividend to its shareholdersand / or retaining or ploughback of its profits. The Policy also sets out thecircumstances and different factors for consideration by the Board at the time of takingsuch decisions of distribution or of retention of profits in the interest of providingtransparency to the shareholders.

The aforesaid policy has also been posted on the Company's website onhttps://eclerx.com/wp-content/uploads/2018/06/ Dividend Distribution Policy.pdf

5. GENERAL RESERVE

The Company has not transferred any amount to the General Reserve for the financialyear ended March 312018.

6. BUY BACK OF EQUITY SHARES

During the year under review the Company bought back 1290000 fully paid-up equityshares of face value of ' 10 each constituting up to 3.24% of the issued subscribed andpaid-up equity share capital of the Company as on March 31 2017. The Buyback wasundertaken on a proportionate basis from the fully paid-up Equity Shareholder(s) /beneficial owner(s) of the Equity Shares of the Company as on February 05 2018 by way ofa Tender Offer for cash at a price of ' 2000 (Rupees Two Thousand only) per Equity Sharefor an aggregate amount up to ' 2580 million excluding transaction cost(s) pursuant toshareholders approval dated January 23 2018.

The Buyback size was about 24.99% of the aggregate paid- up equity capital and freereserves of the Company as per the standalone financial statements of the Company for thefinancial year ended March 31 2018. Demat Equity Shares accepted under the Buyback weretransferred to the Company's demat account and the unaccepted demat Equity Shares werereturned to respective Seller Members / custodians by the Indian Clearing CorporationLimited / BSE. There were no Physical Shares tendered in the Buyback. The shares acceptedunder the Buy Back were extinguished and total issued and paid up capital was thus reducedto 38629082 equity shares of ' 10/- each.

7. PUBLIC DEPOSITS

During the year your Company has not accepted any deposits within the meaning of theprovisions of Section 73 of the Companies Act 2013.

8. SUBSIDIARIES / ASSOCIATE COMPANIES

MCA vide its notification dated September 20 2017 issued the Companies (Restriction onnumber of layers) Rules 2017 whereby a holding company can create upto 2 layers ofsubsidiaries only. There is no compulsion to reduce the layers of subsidiaries as of nowbut Form CRL -1 has to be filed within 150 days elaborating the above structure. Nofurther addition in layers of subsidiary is allowed except under aforesaid overseasacquisition route. The Company is in compliance with the maximum numbers of investmentlayers allowed.

In this regard Company has filled necessary E-forms with Registrar of Companies withindue date.

The Company has following subsidiaries/associates as on March 31 2018:

9. PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIES ASSOCIATES AND JOINTVENTURES COMPANIES INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENTS

There has been no material change in the nature of business of subsidiaries andassociate Company during the year under review.

Pursuant to Section 136 of the Companies Act 2013 the Financial Statements includingConsolidated Financial Statements along with relevant documents have been posted on theCompany's website www.eClerx.com. The same are also open for inspection at the RegisteredOffice of the Company on all working days (Monday to Friday) between 11.00 a.m. to 6.00p.m. up to the date of AGM and at the venue of AGM during AGM.

A statement containing salient features of performance and financial position of eachof the subsidiaries included in the financial statements is attached as Annexure-I to thisreport in Form AOC-1.

10. CLIENT BASE

The client segmentation based on the last 12 months' accrued revenue for the currentand previous years on a consolidated basis is as follows:

Clients FY 2017-18 FY 2016-17 FY 2015-16 FY 2014-15 FY 2013-14
US$ 0.5-1 million 17 14 16 7 6
US$ 1-5 million 17 18 17 7 6
More than US$ 5 million 6 6 7 7 6

11. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THEFINANCIAL STATEMENTS

As per explanation to Section 134 of the Companies Act 2013 the Internal FinancialControls (IFC) are reviewed by your management and key areas are subject to variousstatutory internal and operational audits based on periodic risk assessment. The findingsof the audits are discussed with the management and key findings are presented before theAudit Committee and Board of Directors for review of actionable items. The review of theIFC Inter-alia consists of the three components of internal controls viz. Entity levelcontrols Key financial reporting controls and Internal controls in operational areas.

12. CHANGES IN SHARE CAPITAL

Particulars No. of shares Amount in Rupees.
Issued subscribed and Paid-up Capital as on April 12017 39784171 397841710
Add: Number of shares allotted during the year FY 2017-18 on account of ESOP Allotment 134911 1349110
Less: Shares bought back via "Tender Offer" Route during the year FY 2017-18 1290000 12900000
Issued subscribed and Paid-up Capital as on March 31 2018 38629082 386290820

13. STATUTORY AUDITORS

M/s. S. R. Batliboi & Associates LLR Chartered Accountants Mumbai [ICAIRegistration No. 101049W / E300004] the Statutory Auditors of the Company were appointedby the Shareholders at their meeting held on July 10 2014 for a period of 5 years i.e.upto conclusion of Nineteenth Annual General Meeting. Pursuant to the Companies AmendmentAct 2017 their appointment is not subject to annual ratification at the AGM with effectfrom May 7 2018. Accordingly the notice does not contain proposal for ratification oftheir appointment.

The Auditors' Report does not contain any qualification reservation or adverse remark.

14. SECRETARIAL AUDIT REPORT

Pursuant to Section 204 of the Companies Act 2013 and Rules thereunder a SecretarialAudit Report for the FY 2017-18 in Form MR-3 given by M/s Mehta & Mehta CompanySecretaries is attached as Annexure-III with this report. The Secretarial Auditors'Report does not contain any qualification reservation or adverse mark.

15. EXTRACT OF ANNUAL RETURN

The extract of Annual Return in the prescribed form MGT-9 forms part of this report asprovided under Section 92 of the Companies Act 2013 read with the Companies (Managementand Administration) Rules 2014 is given in the Annexure-II forming part of this report.

16. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALSIMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE

The Company has not received any significant or material orders passed by anyregulatory Authority Court or Tribunal which shall impact the going concern status andCompany's operations in future.

17. DIRECTORS

In accordance with the Articles of Association of the Company Anjan Malik [DIN:01698542] retires from office by rotation and being eligible offers himself forre-appointment at the forthcoming Annual General Meeting of the Company.

The brief resume of Anjan Malik as required interalia in terms of Regulation 36 ofthe Listing Regulations and the required proposal for reappointment of the above Directorat the forthcoming Annual General Meeting is included in the Notice convening this AnnualGeneral Meeting. Anjan Malik is not a Key Managerial Personnel pursuant to the provisionsof Companies Act 2013.

During the year Mr. V. K. Mundhra resigned from the Board on November 01 2017 and Mr.Vikram Limaye resigned from the Board on June 10 2017.

During the year Mr. Gaurav Tongia has resigned from the designation of CompanySecretary & Compliance officer effective from November 17 2017 and his place Mr.Rratik Bhanushali has been appointed as Company Secretary & Compliance officereffective from on January 30 2018.

18. DECLARATION BY INDEPENDENT DIRECTOR(S)

The Company has received Certificate of Independence from all Independent Directorsinter- alia pursuant to Section 149 of the Companies Act 2013 confirming and certifyingthat they have complied with all the requirements of being an Independent Director of theCompany. The Independent Directors have also confirmed that they have complied with theCompany's Code of Conduct.

19. BOARD COMMITTEE AND INDIVIDUAL DIRECTORS EVALUATION

The Companies Act 2013 rules there under and the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 provide that the Annual Report of the Companyshall disclose the following:

• Manner in which formal performance evaluation of the Board its Committees andIndividual Directors including independent directors has been carried out; and

• Evaluation criteria.

To this effect the Board of Directors had appointed an external expert on Boardevaluation for facilitating and carrying out the said evaluation who carried out thereview analysis evaluation and submitted its report. This exercise inter-alia aimed atevaluation of the Board at a collective level and evaluation of individual board membersincluding peer review and self-assessment. The individual reports were submitted torespective directors whereas the Board level report was placed before the Nomination and

Remuneration Committee as well as the Board of Directors for review requisite notingand action items.

The said review was carried out based on pre-defined comprehensive checklist(s)covering evaluation criteria(s) inter- alia modelled on the following factors:

• Accountability towards shareholders;

• Critical review of business strategy;

• Conducive environment for candid communication and rigorous decision making;

• Board's focus on wealth maximization for shareholders;

• Board's ability to demand and foster higher performance;

• Business Continuity preparedness;

• Skill Set and mix thereof among Board members;

• Flow of information so as to enable informed opinions by the Directors;

• Adequacy of meetings of directors in terms of frequency as well as the timededicated for discussions and deliberations.

The peer review checklist encouraged the Directors to share their feedback suggestionsand opinions frankly which were then collated and submitted to each of the directors fornoting information and requisite future action as deemed fit.

On the same lines review of committees of Board of Directors was also conducted basedon pre-defined comprehensive checklist(s) covering evaluation criteria(s) inter-aliamodelled on the following factors:

• Contribution control and counseling by the Committee on various matters;

• Qualitative comments/inputs;

• Deficiencies observed if any;

• Qualification of members constituting the Committee;

• Attendance of Committee members in the respective meetings;

• Frequency of meetings.

In addition the Chairman was also evaluated on the key aspects of his role.

In separate meetings of Independent Director which was held on December 22 2017 andMay 23 2018 performance inter- alia of non-independent directors performance of theBoard as a whole and performance of the Chairman was evaluated taking into account theviews of executive director and non- executive directors. The same was discussed in thesubsequent Nomination and Remuneration Committee Meeting and Board Meeting that followedthe meeting of Independent Directors.

I t is intended to continue with this practice going forward and explore to enhance thescope of this exercise if and as deemed fit.

20. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

The details of Familiarisation programme held during the year is available on thewebsite of the Company. The introductory familiarization program is undertaken as and whenthere is a new induction on the Board of the Company which inter-alia covers thefollowing:

a) Introduction and meeting with other Directors on the Board and the SeniorManagement;

b) Brief introduction about the business and nature of industry of the Company in whichit operates;

c) Roles rights and responsibilities of directors including independent Director(s);

d) Extant Committees of Board of Directors;

e) Meetings of Board and Committees venue generic dates and timings when suchmeetings are generally held and the Annual General Meeting of shareholders of the Company;

f) The Codes of Conduct which are in place and applicable to the Directors;

g) Remuneration payable to Directors pursuant to Shareholders approval to that effect;

h) Liability Insurances taken by the Company to cover directors.

In addition to this periodic familiarization programmes are conducted for thedirectors about the business operations industry overview threats opportunities andchallenges in respective verticals. Furthermore detailed business presentations are madeat quarterly meetings of Board of Directors. The details of familiarization programmesimparted to independent directors have been posted on the website of the Company onhttps://eclerx. com/wp-content/uploads/2018/07/DetailsofFamiliarisationProgrammes-Independent Directors.pdf

Support is provided for independent directors if they choose to attend educationalprograms in the area of Board / Corporate governance.

The Directors have access to Management to seek any additional informationclarification and details as may be required. The standard letter of appointment of Non -Executive Independent Directors of the Company containing the requisite details has beenposted on the website on https://eclerx.com/wp-content/ uploads/2018/06/StandardAppointmentLetter-IDs.pdf

21. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134 of the Companies Act 2013 and other applicable rules andregulations the Directors to the best of their knowledge and ability confirm that:

a. In the preparation of the annual accounts for the FY 2017-18 the applicableaccounting standards had been followed along with proper explanation relating to materialdepartures if any;

b. the Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31 2018 and of the profit orloss of the Company for the year ended on that date;

c. the Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

d. the Directors had prepared the annual accounts on a going concern basis;

e. the Directors had laid down internal financial controls to be followed by theCompany and that such Internal Financial Controls are adequate and were operatingeffectively;

f. the Directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.

22. BOARD MEETINGS

During the FY 2017-18 6 (Six) Board Meetings were held as follows:

May 30 2017 August 11 2017 November 12017
December 22 2017 January 30 2018 March 13 2018

The number of committees and particulars of attendance of the Directors at the boardand committee meetings are detailed in the Corporate Governance Report of the Companywhich forms a part of this report. The intervening gap between the Meetings was within theperiod prescribed under the Companies Act 2013 and the Listing Regulations.

23. AUDIT COMMITTEE

Composition of Audit Committee:

Name Designation
Biren Gabhawala Chairman
Pradeep Kapoor Member
Anish Ghoshal Member
Deepa Kapoor Member
PD Mundhra Member

There were no such instances wherein the recommendations of the Audit Committee wererejected by the Board of Directors.

24. REPORTING OF FRAUD BY THE STATUTORY AUDITORS

Pursuant to Section 134 of the Companies Act 2013 read with Rule 13 of Companies(Audit and Auditors) Rules 2014 as amended from time to time if an auditor of acompany in the course of performance of his duties as Statutory Auditor has reason tobelieve that an offence of fraud involving individually an amount below rupees one croreis being or has been committed against the company by its officers or employees theauditor shall report the matter to the Audit Committee of the Company.

There were no such instances of fraud reported by the Statutory Auditor during the FY2017-18.

25. NOMINATION AND REMUNERATION POLICY

In terms of provisions of the Companies Act 2013 and the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 as amended from time to time the policy onnomination and remuneration of Directors Key Managerial Personnel (KMP) SeniorManagement and other employees of the Company had been formulated by the Nomination andRemuneration Committee of the Company and was approved by the Board of Directors vide itsresolution dated July 31 2014. The policy acts as a guideline for determininginter-alia qualifications positive attributes and independence of a Director mattersrelating to the remuneration appointment removal and evaluation of performance of theDirectors Key Managerial Personnel Senior Management and other employees. The aforesaidpolicy has also been posted on the Company's website on https://eclerx.com/wp-content/uploads/2018/06/NominationRemunerationPolicy.pdf

26. DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM

Pursuant to the provisions of the Companies Act 2013 and Listing Regulations theCompany has in place Whistle Blower Policy to encourage all employees or any other persondealing with the Company to disclose any wrong doing that may adversely impact theCompany the Company's customers shareholders employees investors or the public atlarge. This policy inter-alia also sets forth (i) procedures for reporting ofquestionable auditing accounting internal control and unjust enrichment matters and (ii)an investigative process of reported acts of wrong doing and retaliation from employeesinter-alia on a confidential and anonymous basis.

The aforesaid policy has also been posted on the Company's website onhttps://eclerx.com/wp-content/uploads/2018/06/ WhistleBlowerPolicy.pdf

27. PARTICULARS OF LOAN GUARANTEE AND INVESTMENTS

Particulars Amount (Rupees in million)
Loan Please refer Notes to Standalone Financial Statement - Note No. 8
Guarantee N.A.
Investment Please refer Notes to Standalone Financial Statement - Note No. 5.1

28. PARTICULARS OF TRANSACTIONS CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

The particulars of the transactions pursuant to the provisions of inter-alia Section188 and the Companies (Meetings of Board and its Powers) Rules 2014 are as under. All thetransaction(s) are in the ordinary course of business and at arms' length basis. Furtherdetails are also set out in the Notes to Standalone Financial Statements.

Pursuant to Related Party disclosure requirements under Part A of Schedule V of ListingRegulations there are no loans and advances outstanding for the year ended March 312018 from subsidiaries associate companies or firms / companies in which directors areinterested.

29. BUSINESS RESPONSIBILITY REPORT

As stipulated under the Listing Regulations the Business Responsibility Reportdescribing the initiatives taken by the Company from environmental social and governanceperspective forms part of the Annual Report.

30. PARTICULARS OF CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO

Information as required inter-alia under Section 134 of the Companies Act 2013 isgiven in the Annexure IV forming part of this report.

31. ENTERPRISE WIDE RISK MANAGEMENT SYSTEM AND RISK MANAGEMENT POLICY

Your Company has in place a well-defined Enterprise Wide Risk Management ('EWRM')framework and Risk Management Policy which inter-alia aims at the following:

1. Alignment of risk appetite and strategy of the organisation by evaluating strategicalternatives setting related objectives and developing mechanisms to manage relatedrisks.

2. Enhancement in risk response decisions by identifying and selecting amongalternative risk responses - risk avoidance reduction sharing and acceptance.

3. Reduction/elimination of operational surprises and losses by identifying potentialevents and establishing responses and reducing associated costs or losses.

4. Identification and management of multiple risks by facilitating effective responseto the interrelated impacts and integrated responses to such risks.

5. Improvement in deployment of capital by providing robust risk information to theManagement so as to effectively assess overall capital needs and prudently manage capitalallocation.

The framework is periodically reviewed by senior management to ensure that the risksare identified managed and mitigated. The same is also periodically reported to the AuditCommittee and the

Board of Directors. The Company has also laid down procedures to inform the Board ofDirectors about risk assessment and minimization procedures.

32. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE PREVENTIONPROHIBITION & REDRESSAL) ACT 2013

The Company has in place an Anti-Sexual Harassment Policy in line with requirementsinter- alia of The Sexual Harassment of Women at Workplace (Prevention Prohibition &Redressal) Act 2013. An Internal Compliance Committee has been set up to redresscomplaints received regarding sexual harassment. All employees (permanent contractualtemporary and trainee) are covered under this policy.

During FY 2017-18 total 9 cases of Sexual harassment were reported all cases havebeen satisfactorily addressed within the defined timelines. Out of 9 cases 2 cases wereunsubstantiated in 1 case the respondent was found to be guilty and appropriate actionwas taken and 6 cases were resolved through conciliation. There were no pending cases ason March 312018.

33. CORPORATE SOCIAL RESPONSIBILITY Brief outline on the CSR Policy

The Company continues to earmark a corpus every year for CSR activities. The eClerxCares team under the guidance of CSR Committee is responsible for championing allphilanthropy and CSR initiatives of the Company. The mission of eClerx Cares is committedto being participants of progress by supporting initiatives in education and child welfareto help measurably improve the lives of underprivileged children.

Our partner NGOs are selected for their projects on child rights and education which isone cause that resonates broadly within the Company. At eClerx we believe that money isonly ever a small part of the solution and our ethos involve the entire organizationheartily contributing to making a difference either through donating clothes and othermaterial for people in distress volunteering their time in training running marathonsfor a cause or engaging with children from schools we sponsor through our corporatefunding.

In today's times the role of CORPORATE SOCIAL RESPONSIBILITY (CSR) is becomingextremely important as forward-thinking socially conscious companies embed initiatives intheir business practices that add value and benefit society build healthy communitiesenhance cultures while at the same time work towards environmental wellbeing. CSR is nowbeing looked at as a concept different from pure philanthropy and more in tune withstrategic intervention that ultimately benefits industry itself and as a strategicintervention of giving back to the society.

The eClerx Cares Committee under the guidance of Board of Directors is responsible forchampioning all CSR initiatives of the Company. While the eClerx Cares Committee approvesand monitors the project funding with different NGOs the 'eClerx Cares Council' at eachlocation champions our employee engagement initiatives. Over the years there has been ahuge increase in the lives touched due to the tireless efforts of the eClerx Cares team.

Employee Engagement

Employees were encouraged to participate enthusiastically in the engagement activitieslaid out across the year. Given below is a list of employee engagement activitiesundertaken in this year:

• Payroll Giving - existing tie up with Nanhi Kali and CRY Till date more than5000 employees contributed a part of their salaries towards payroll giving. eClerx matchescontribution made by each employee.

• A 200 strong contingent of eClerx employees participated in the StandardChartered Mumbai Marathon pledging their support to the cause of education for the poorand downtrodden. While 120 participated in the 6 km Dream Run category 80 employeesparticipated in the professional categories of 10 km and 21 km Half Marathon.

• 120 employees from our Pune office participated in the Heritage Walk organizedby our partner NGO - SAMPARC to promote the cultural heritage of Maharashtra and topromote the work done by SAMPARC in the Lonavala region.

• Annual Learn-and-Fun Day event for the students of schools sponsored through ourcorporate funding visit eClerx offices for a day.

• 'Joy of Giving' - activity where employees donate gifts requested by children ofa supported NGO.

• Our employees supported government school students of Std Xth from our partnerNGOs to fill up their online college admission forms.

• Performances by kids from Seva Sadan and LAHI at Mumbai SAMPARC and Snehalayaat Pune and Shanti Niketan and Jyoti Sarup Kanya Asra at Chandigarh for our Annual Daycelebrations - Fiesta.

• Some of our employees from Mumbai and Pune participated in a wall paintingactivity to promote the need to 'Stop Modern Day Slavery'.

• Old and reusable material were contributed by our employees to Goonj whichundertakes disaster relief humanitarian aid and community development in parts of 22states across India.

• With the help of volunteers from Pune helped to stamp and barcode books whichwere used in libraries set up by Akshar Bharati in several schools across Maharashtra.

• eClerx had sponsored a computer lab at JSKAS which was completely built andmanaged by the volunteers. A team of dedicated employees from Chandigarh takes turns toconduct basic computer training for 50+ children from Jyoti Sarup Kanya Asra Society.

Other Details:

a. Corporate Social Responsibility Policy:

The Company has in place Corporate Social Responsibility Policy.

b. Web-link of the CSR Policy and projects or programs:

CSR Policy of the company is available on https://eclerx.com/wp-content/uploads/2018/06/CSRPolicy.pdf

c. Composition of CSR Committee:

Name Designation
Deepa Kapoor Chairperson
Anish Ghoshal Member
Biren Gabhawala Member
PD Mundhra Member

d. Average Profit Before Tax for last 3 Financial Years

Financial Year Average Net Profit (in Million)
2014-15 2700.34
2015-16 3911.02
2016-17 4053.91
Total Profit 10665.27
Average Profit 3555.09

e. Prescribed CSR Expenditure (2% of the average profit as in item (d) above):' 71.11million

f. Details of CSR spent during the financial year

a. Amount spent during the Financial year: ' 71.11 million

b. Amount unspent if any: Nil

c. Manner in which the amount spent during the financial year is detailed below:

CSR Projects or activities identified Sector in which the project is covered Projects or Programs 1. Local area or other 2. Specify the State and district where projects or program was undertaken Amount outlay (budget) projects or program wise (Rupees in Million) Amount spent on the projects or programs Sub heads: 1. Direct expenditure on projects or programs 2. Overhead (Rupees in Million) Cumulative Expenditure upto March 312018 (Rupees in Million) Direct or Implementing Agency*
1 Sanskriti Samvardhan Mandal Child Education Other - Maharashtra 4.72 4.72 4.72 Through Implementing Agency
2 Parivaar - Amar Bharat Vidyapeeth Child Education Other - West Bengal 4.76 4.76 4.76 Through Implementing Agency
3 SAMPARC Child Education Other - Maharashtra 11.29 11.29 11.29 Through Implementing Agency
4 LAHI (Lend a Hand India) Child Education Local Area - Mumbai Pune 14.58 14.58 14.58 Through Implementing Agency
5 Snehalaya Child Education Other - Maharashtra 5.96 5.96 5.96 Through Implementing Agency
6 Jyoti Sarup Kanya Aasra Child Education Local Area - Chandigarh 5.68 5.68 5.68 Through Implementing Agency
7 Kaveri Vanitha Sevashrama Child Education Other - Bangalore 1.71 1.71 1.71 Through Implementing Agency
8 NASSCOM Foundation Child Education Local Area - Mumbai Pune and Chandigarh 4.75 4.75 4.75 Through Implementing Agency
9 Magic Bus Child Education Local Area - Mumbai 3.93 3.93 3.93 Through Implementing Agency
10 Seva Sadan Child Education Local Area - Mumbai 1.50 1.50 1.50 Through Implementing Agency
11 K C Mahindra Trust A/c Nanhi Kali Child Education Local Area - Mumbai 1.40 0.43 0.43 Through Implementing Agency
12 CRY Child Education Local Area - Mumbai 1.00 1.00 Through Implementing Agency
13 Magic Bus (TMM) Child Education Local Area - Mumbai 2.01 2.01 2.01 Through Implementing Agency
14 LAHI (Lend a Hand India) (TMM) Child Education Local Area - Mumbai Pune 1.34 1.34 1.34 Through Implementing Agency
15 United Way (TMM) Child Education (Admin Exp) Local Area - Mumbai 0.65 0.65 0.65 Through Implementing Agency
16 CSR Lead Child Education (Admin Exp) Other 1.00 1.00 1.00 Direct
17 Internal engagement events and other Admin Expenses Child Education (Admin Exp) Other 0.50 0.78 0.78 Direct
18 Research study on Modern Slavery Child Education Local Area - Mumbai 0.70 0.74 0.74 Through Implementing Agency
19 Employee Driven Programs Child Education Local Area - Mumbai Pune and Chandigarh 2.00 2.08 2.08 Through Implementing Agency
20 Capacity building for CSR Staff and NGO Partners Child Education (Admin Exp) Local Area - Mumbai 0.44 0.47 0.47 Through Implementing Agency
21 SAMPARC (Heritage Walk) Child Education (Admin Exp) Local Area - Pune 0.12 0.12 0.12 Through Implementing Agency
22 Impact Assessment of four Programs Child Education Local Area - Mumbai 1.00 1.11 1.11 Through Implementing Agency
23 Bal Asha Trust Child Education Local Area - Mumbai 0.50 0.50 0.50 Through Implementing Agency
24 Contingency Amount Child Education Other 0.57 - - Direct
Total 71.11 71.11 71.11

"Details of implementing Agency(ies):

eClerx Cares currently works with 11 NGOs for whom we have approved direct funding.Details of these NGOs and the projects are as below:

• SAMPARC: eClerx supports livelihood support for rural and tribal underprivilegedchildren of interior villages of Maharashtra school and hostel facilities for tribal andorphan students sports training and vocational training support to rural school dropouts and higher education support for senior girls of SAMPARC.

• Sanskriti Samwardhan Mandal (SSM): Strengthening Resources for EmergingExcellence (SREE) - project to Quality Education. Project Sunrise - A project to carverural athletes. Vocational Training Center - with an objective to empower unemployed ruralyouths with vocational skills making them self-reliant. Primary School upgrade -renovation and expansion of 50 year old school.

• Magic Bus: eClerx funds the Child Education Program by Magic Bus for childrenliving in shanties in the Mumbai and Pune.

The objective of this program is work on the all-round holistic development of childrenfrom underprivileged communities using sports as a medium by motivating and mentoring themto develop positive attitudes and behaviours in 3 life values (Education Health andGender) understand the importance of play and ensuring the development socio-emotionalskills. The Work Readiness program aims to help adolescents transit from their educationto a sustainable livelihood by providing Career Guidance Life-skills Basic SpokenEnglish and Computer Literacy skilling.

• Lend-A-Hand-India (LAHI): eClerx funds to provide job and life skills trainingto young boys and girls as part of secondary school curriculum under 'Project Swadheen' inhigh schools all over Maharashtra. (Swadheen in Hindi means self-dependent). It providesstudents with hands-on experience in skills such as electrical wiring weldingagriculture animal husbandry energy environment and home and health science. On thebasis of the success demonstrated in 50 schools supported by eClerx the program is nowlaunched in 500 schools across Maharashtra with the Central and State Governments.

• Amar Bharat Vidyapeeth (Parivaar): eClerx funds education expenses of studentsof the Parivaar school at Kolkata.

• Snehalaya: Project focusing on girl child and education in Ahmednagar. eClerxfunds the education expenses of children in Snehalaya's Shelter Home - kids removed fromred light areas of Ahmednagar.

• Kaveri Vanitha Sevashrama (KVS) Bangalore: eClerx support to cover educationexpenses of orphan children.

• Jyoti Sarup Kanya Aasra Society (JSKAS) Chandigarh: Girls home aiming to helpthe destitute and abandoned girls. Currently there are girls ranging from two yearinfants to twenty three year olds. eClerx has funded the development of a computer /communication lab with 25 computers.

• Seva Sadan - Seva Sadan runs schools for underprivileged children and a shelterhome for destitute women and girls. eClerx partnered with Seva Sadan for setting up ofscience labs and computer center in the schools.

• NASSCOM Foundation - eClerx partnered with NASSCOM Foundation to provide new ageskills of digital analytics and nonvoice CRM to over 600 students from tier 2 and 3colleges from Mumbai Pune and Chandigarh.

We hereby declare that implementation and monitoring of the CSR Policy are incompliance with CSR Policy and in compliance with CSR objectives and Policy of theCompany.

Deepa Kapoor
Mumbai PD Mundhra Chairperson
May 23 2018 Executive Director CSR Committee